The latest newsletter focuses on a number of major current events in the airline industry that are important to both union and nonunion employees, including:
A detailed report on the 18th Annual MRO Americas Conference in April including updates on outsourcing and other trends in the industry;
TAMC’s success in lobbying Congress for enactment of the new FAA reauthorization bill;
The current organizing drive among American Airline mechanics and related to become Teamsters;
A victory in March among Horizon Air mechanics to fend off a raid by AMFA;
Report on the Teamster Outsourcing Defect Report (TODR) and how it’s used by TAMC.
Another installment of “Better Know Your Government” to educate our members on the political process;
With so much important news and information in one newsletter, it is essential that this newsletter be distributed to all the aviation mechanics and related members represented by the Teamsters Union. Please take time to read this newsletter and pass it on to your coworkers.
Read it today!
Tuesday, August 28, 2012
Negotiations Update
Proposed path to resolution
The Steering Committee was invited to Chicago yesterday to hear a proposed path to expedite negotiations. The Company stated that they would like to reach a Joint Agreement by the end of this year and they offered a new method recently developed by the National Mediation Board to facilitate this process. The method developed by the NMB was a result of the Dunlop II report issued in April of 2010 and is based on the principals of interest based bargaining or IBB. IBB is generally seen as a quicker process than traditional or adversarial bargaining because rather than disputing particular words in any given Article, the parties first come to an agreement on how the Article should work in a practical application and then once agreement is reached on an issue, language is crafted to address the parties agreement.
Moving Forward
After the rank and file committee discussed the proposed schedule it was unanimously agreed that this approach would be acceptable to the Union. The company was notified of the decision and now the parties will jointly approach the NMB to begin the process. The first item that will need addressed is the protocol agreement. This agreement will establish a timeline as well as consequences in the event the parties are not able to reach an agreement by the agreed upon final date. The next step would be to get the negotiating committee to training for IBB which will be presented by the NMB. Once those steps are completed; which will happen quickly, bargaining in earnest will begin.
Questions about the process
Q. By agreeing to this process are we in traditional mediated talks?
A. No. This process is facilitated by the NMB but this is not mediation in the traditional sense. In other words, there will be no deadlock at the end and the Negotiating Committee could simply revert to traditional bargaining if an agreement is not reached.
Q. Won’t this potentially add to the length of time needed to reach an agreement if the process fails?
A. Possibly, but considering the average length of time from filing for mediation to getting a release by the NMB is now 22 months the Steering Committee felt it would be in the membership’s best interest try to reach an agreement quickly and saw the risks as minimal
Q. Does the membership concede any bargaining rights by using this process?
A. No. If this process is unsuccessful the parties begin traditional Section 6 bargaining under the RLA with full rights to the regular process.
Look for future updates that will discuss the protocol agreement, IBB training and progress made in the near future.
The Steering Committee was invited to Chicago yesterday to hear a proposed path to expedite negotiations. The Company stated that they would like to reach a Joint Agreement by the end of this year and they offered a new method recently developed by the National Mediation Board to facilitate this process. The method developed by the NMB was a result of the Dunlop II report issued in April of 2010 and is based on the principals of interest based bargaining or IBB. IBB is generally seen as a quicker process than traditional or adversarial bargaining because rather than disputing particular words in any given Article, the parties first come to an agreement on how the Article should work in a practical application and then once agreement is reached on an issue, language is crafted to address the parties agreement.
Moving Forward
After the rank and file committee discussed the proposed schedule it was unanimously agreed that this approach would be acceptable to the Union. The company was notified of the decision and now the parties will jointly approach the NMB to begin the process. The first item that will need addressed is the protocol agreement. This agreement will establish a timeline as well as consequences in the event the parties are not able to reach an agreement by the agreed upon final date. The next step would be to get the negotiating committee to training for IBB which will be presented by the NMB. Once those steps are completed; which will happen quickly, bargaining in earnest will begin.
Questions about the process
Q. By agreeing to this process are we in traditional mediated talks?
A. No. This process is facilitated by the NMB but this is not mediation in the traditional sense. In other words, there will be no deadlock at the end and the Negotiating Committee could simply revert to traditional bargaining if an agreement is not reached.
Q. Won’t this potentially add to the length of time needed to reach an agreement if the process fails?
A. Possibly, but considering the average length of time from filing for mediation to getting a release by the NMB is now 22 months the Steering Committee felt it would be in the membership’s best interest try to reach an agreement quickly and saw the risks as minimal
Q. Does the membership concede any bargaining rights by using this process?
A. No. If this process is unsuccessful the parties begin traditional Section 6 bargaining under the RLA with full rights to the regular process.
Look for future updates that will discuss the protocol agreement, IBB training and progress made in the near future.
Wednesday, August 22, 2012
Negotiations Update
August 22, 2012
Negotiations Update
Negotiations will continue later this week in Chicago. UAL representatives have invited the entire steering committee for a brief meeting pertaining to upcoming discussions. On behalf of the membership, the Airline Division accepted the meeting and informed the committee.
The recent news regarding the Pilots “Agreement in Principal” as well as the announcement to expedite negotiations with the IAM, are telling signs that the company is indeed committed to a timely conclusion to agreement talks with all of its represented unions. This is the message that has been conveyed, and the company is showing real effort in the fulfilling this commitment.
The full committee will be meeting on Thursday, and it is expected that the presentation from the company will include Mike Bonds, Doug McKeen, Jim Keenan, Mark Mounsey and Joe Ferreria, as well as the company negotiating team. A report of what transpires at this meeting will be provided as quickly as possible after its conclusion.
Second Quarter Earnings Report
One of the departments within the Teamsters that provide us tremendous support is the very capable and talented Capital Strategies Department. Jamie Fleming is a Corporate and Financial Research Analyst with this department and offers this review on UAL as part of her quarterly report to the Airline Division.
United Airlines (reported July 26, 2012)
Price: $19.20
Reported ongoing earnings per share of $1.41, far behind analyst consensus estimates for earnings of $1.65 per share.
Several possible explanations for the miss include a one-time hit to labor costs for high medical expenses, an accounting adjustment for air traffic liability, and plain old lower revenue with higher costs.
UAL management had previously guided down second quarter PRASM (Passenger Revenue per Available Seat Mile), but perhaps some analysts did not suitably lower their expectations.
Investors beginning to question UAL management for repeatedly missing earnings expectations in different ways, especially with merger synergies starting to really kick in.
Ex-fuel costs rose 2.1%, a point lower than the industry, but cost pressures are building as the combined company tries to fix service problems and put labor contracts together. (which usually means raising them)
Expect higher cost increases through the second half of 2012 – 3-4% increases likely
Consolidated revenues increased 1.3% in the quarter.
Operating margin of 7.9% is lower than last year, and analysts expect UAL to be the only airline reporting LOWER year-over-year margins.
Analyst opinion:
Glenn Engel of Merrill Lynch: Rating is Neutral with price target $25
Michael Linenberg of Deutsche Bank: Rating is Buy with price target $31
Kevin Crissey of UBS: Rating is Buy with price target $36
Seniority Integration Committee
The Professional Association Attorneys at Law of Sugarman & Susskind were independently hired by Teamster Local 769 to further investigate the subject of the consent decree as related to the combined group of sCO and sUA mechanics.
In their final report, the law firm, through the attorney Howard S. Susskind, advanced and principally agreed to the two earlier opinions of Airline Division Attorney Ed Gleason, and the attorneys from Spivak Lipton LLP, who were retained to investigate this matter.
In his report, Susskind expressed the inherent difficulties in arguing against the position of the other attorney’s opinions as related to consent decree seniority and hire date placing. The following are inserts of the brief.
First of all the original consent decree signed by the now deceased Judge did not contain a fixed termination date. “Consent decrees remain in effect until they terminate of their own accord, are fully satisfied, or are subsequently modified or set aside through judicial action. None of those events has occurred. The consent decree by its express terms was to remain in effect for United and its successors as well as for the labor unions named therein and their successors.” The opinion of validity from the two prior law groups is consistent.
The second argument turns to the stage of the integration process and demands the question; is the integration done in a fair and equitable manner?
To this Susskind writes, “Reasonable people can and do disagree as to what is fair and equitable when it comes to seniority integration. In the event such intra-union disagreement is not resolved, it is my understanding that there is a provision for arbitration. It is important to bear in mind that a significant number of employees presently have their seniority for the purposes of layoff and recall established by the terms of the decree. United is bound by the decree. The decree remains in full force and effect. To the extent that an arbitrator is called upon to resolve an intra-union dispute over seniority, these are powerful and persuasive considerations affecting his award.”
The next question became the ability to modify the agreement through judicial means (arbitration does not have the authority to override federal courts).
Susskind responds, “The terms of the decree itself place jurisdiction over its enforcement in the United States District Court for the Northern District of Illinois, in Chicago. Any litigation to modify or terminate the decree must be filed there. The judge who entered the decree is no longer on the bench. Any judge hearing the case would have to familiarize himself with litigation that began in 1973, a factor that militates against an expedited ruling on a petition to modify or terminate the decree”.
He further explained the two avenues that could be used to argue the opening and exploration of the case.
The first would necessitate the involvement of all parties implicated in the decree within the entire company. This would suggest having every union as well as the company agree that the decree should be revisited. In some cases this could delay their own negotiation proceedings.
The second would be to argue with a high burden of proof that the original decree is no longer just or equitable in regards to all parties of the class and craft.
Susskind writes, “beyond the costs and delays that come with any federal litigation, this standard amounts to proving that the consent decree’s layoff and recall provision is unjust and inequitable – a provision that has been embodied in a collective bargaining agreements for more than a decade, one that is supported by IBT locals and members as well at this time.”
To summarize, Susskind’s report ended with; “the consent decree remains in effect. It may be modified or terminated, but only through litigation in the Northern District of Illinois. That litigation would be prolonged, expensive, and – give the high standard that must be met to modify a decree – unlikely to succeed based upon the information provided. An arbitrator may not modify or rescind the decree and would find it persuasive (and possibly even binding) in issuing his own ruling. To the extent that the decree’s own terms allow modification through collective bargaining, that provision of the decree does not apply at this time to an intra-union effort to integrate seniority.”
The decision to investigate this further has been the resolution of some of the Locals. The Airline Division would like to express the appreciation of these Locals for so diligently looking after their member’s best interest. It is recognized as the Locals responsibility to regard the absolute safe guard of each of their members. It is to the benefit of all of us as UAL Teamsters that all arguments on this subject are heard, and that each Local and member has the ability to voice their individual concerns.
Negotiations Update
Negotiations will continue later this week in Chicago. UAL representatives have invited the entire steering committee for a brief meeting pertaining to upcoming discussions. On behalf of the membership, the Airline Division accepted the meeting and informed the committee.
The recent news regarding the Pilots “Agreement in Principal” as well as the announcement to expedite negotiations with the IAM, are telling signs that the company is indeed committed to a timely conclusion to agreement talks with all of its represented unions. This is the message that has been conveyed, and the company is showing real effort in the fulfilling this commitment.
The full committee will be meeting on Thursday, and it is expected that the presentation from the company will include Mike Bonds, Doug McKeen, Jim Keenan, Mark Mounsey and Joe Ferreria, as well as the company negotiating team. A report of what transpires at this meeting will be provided as quickly as possible after its conclusion.
Second Quarter Earnings Report
One of the departments within the Teamsters that provide us tremendous support is the very capable and talented Capital Strategies Department. Jamie Fleming is a Corporate and Financial Research Analyst with this department and offers this review on UAL as part of her quarterly report to the Airline Division.
United Airlines (reported July 26, 2012)
Price: $19.20
Reported ongoing earnings per share of $1.41, far behind analyst consensus estimates for earnings of $1.65 per share.
Several possible explanations for the miss include a one-time hit to labor costs for high medical expenses, an accounting adjustment for air traffic liability, and plain old lower revenue with higher costs.
UAL management had previously guided down second quarter PRASM (Passenger Revenue per Available Seat Mile), but perhaps some analysts did not suitably lower their expectations.
Investors beginning to question UAL management for repeatedly missing earnings expectations in different ways, especially with merger synergies starting to really kick in.
Ex-fuel costs rose 2.1%, a point lower than the industry, but cost pressures are building as the combined company tries to fix service problems and put labor contracts together. (which usually means raising them)
Expect higher cost increases through the second half of 2012 – 3-4% increases likely
Consolidated revenues increased 1.3% in the quarter.
Operating margin of 7.9% is lower than last year, and analysts expect UAL to be the only airline reporting LOWER year-over-year margins.
Analyst opinion:
Glenn Engel of Merrill Lynch: Rating is Neutral with price target $25
Michael Linenberg of Deutsche Bank: Rating is Buy with price target $31
Kevin Crissey of UBS: Rating is Buy with price target $36
Seniority Integration Committee
The Professional Association Attorneys at Law of Sugarman & Susskind were independently hired by Teamster Local 769 to further investigate the subject of the consent decree as related to the combined group of sCO and sUA mechanics.
In their final report, the law firm, through the attorney Howard S. Susskind, advanced and principally agreed to the two earlier opinions of Airline Division Attorney Ed Gleason, and the attorneys from Spivak Lipton LLP, who were retained to investigate this matter.
In his report, Susskind expressed the inherent difficulties in arguing against the position of the other attorney’s opinions as related to consent decree seniority and hire date placing. The following are inserts of the brief.
First of all the original consent decree signed by the now deceased Judge did not contain a fixed termination date. “Consent decrees remain in effect until they terminate of their own accord, are fully satisfied, or are subsequently modified or set aside through judicial action. None of those events has occurred. The consent decree by its express terms was to remain in effect for United and its successors as well as for the labor unions named therein and their successors.” The opinion of validity from the two prior law groups is consistent.
The second argument turns to the stage of the integration process and demands the question; is the integration done in a fair and equitable manner?
To this Susskind writes, “Reasonable people can and do disagree as to what is fair and equitable when it comes to seniority integration. In the event such intra-union disagreement is not resolved, it is my understanding that there is a provision for arbitration. It is important to bear in mind that a significant number of employees presently have their seniority for the purposes of layoff and recall established by the terms of the decree. United is bound by the decree. The decree remains in full force and effect. To the extent that an arbitrator is called upon to resolve an intra-union dispute over seniority, these are powerful and persuasive considerations affecting his award.”
The next question became the ability to modify the agreement through judicial means (arbitration does not have the authority to override federal courts).
Susskind responds, “The terms of the decree itself place jurisdiction over its enforcement in the United States District Court for the Northern District of Illinois, in Chicago. Any litigation to modify or terminate the decree must be filed there. The judge who entered the decree is no longer on the bench. Any judge hearing the case would have to familiarize himself with litigation that began in 1973, a factor that militates against an expedited ruling on a petition to modify or terminate the decree”.
He further explained the two avenues that could be used to argue the opening and exploration of the case.
The first would necessitate the involvement of all parties implicated in the decree within the entire company. This would suggest having every union as well as the company agree that the decree should be revisited. In some cases this could delay their own negotiation proceedings.
The second would be to argue with a high burden of proof that the original decree is no longer just or equitable in regards to all parties of the class and craft.
Susskind writes, “beyond the costs and delays that come with any federal litigation, this standard amounts to proving that the consent decree’s layoff and recall provision is unjust and inequitable – a provision that has been embodied in a collective bargaining agreements for more than a decade, one that is supported by IBT locals and members as well at this time.”
To summarize, Susskind’s report ended with; “the consent decree remains in effect. It may be modified or terminated, but only through litigation in the Northern District of Illinois. That litigation would be prolonged, expensive, and – give the high standard that must be met to modify a decree – unlikely to succeed based upon the information provided. An arbitrator may not modify or rescind the decree and would find it persuasive (and possibly even binding) in issuing his own ruling. To the extent that the decree’s own terms allow modification through collective bargaining, that provision of the decree does not apply at this time to an intra-union effort to integrate seniority.”
The decision to investigate this further has been the resolution of some of the Locals. The Airline Division would like to express the appreciation of these Locals for so diligently looking after their member’s best interest. It is recognized as the Locals responsibility to regard the absolute safe guard of each of their members. It is to the benefit of all of us as UAL Teamsters that all arguments on this subject are heard, and that each Local and member has the ability to voice their individual concerns.
Tuesday, August 21, 2012
United’s First Boeing 787 Takes Flight
United’s 787 touches down in Everett. Image by Malcolm Muir.
The three hour flight took the 787 over Washington state and northern Oregon before heading back to Paine Field. During the flight, Boeing crew members put the 787′s systems through multiple tests.
Seattle PI.
Wednesday, August 8, 2012
Negotiations Update
The Steering Committee concluded the first part of the amalgamation process last week by creating a template to be used as an opener to present to the company. Proposals were submitted through a process that began in late April and ran through June. Members were encouraged to study the agreement and submit suggestions to strengthen our future position. These suggestions were then vetted through a three week process by the members of the steering committee. Lengthy discussions were held regarding each of the member’s submissions, and in some cases the proposals were voted down, and in others they were approved. Member submissions also sparked several discussions by the committee on various applications of the agreement that are either unclear or believed weak by the Committee. The result of these spontaneous discussions should be improved language and clarification for the membership regarding many articles of the agreement.
It should be noted, there were at times very contentious topics discussed during these meetings as a result of three groups who have become very accustomed to habit suddenly being forced to change. Through it all, each member of the committee acted responsibly, respectful, and viewed each other’s concerns with interest and open consideration. This level of professionalism was very appreciated by the leadership, and has been beneficial to the membership.
The next step in the process is to request and submit available dates to meet with the company for face to face talks regarding these new member and Steering Committee proposals. These joint talks will be attended by the Negotiating Committee whose members are still being decided by each of the represented Locals. The Steering Committee, however, still has a major function and will meet again periodically to confer with the Negotiating Committee in an effort to be sure as many stations and work areas as possible are represented in this new agreement.
During the Steering Committee process, we spent time meeting in three different locations; Los Angeles, Houston, and Denver. We would all like to thank the committee members and Locals from each of the host cities for making the long hours and time away from our families more bearable.
Meet the Steering Committee
These following members from various Locals formed the Steering Committee.
Houston Local 19: Bob Clever, Jack Harran, Craig Larson, William Lewis, Michael Nerren, Victor Ruiz,
Phoenix Local 104: Jerome Sanchez
Newark Local 210: Vinny Graziano, Steve Olson
New York Local 210: Larry Calhoun (JFK), Allen Cosides (LGA)
Washington DC Local 210: Jay Koreny
Orlando Local 769: Paul Becerra, Frank Musko, Ryan Rostek
Chicago Local 781: Scott Baroni, Mike Pecoraro, Paul Casper
Denver Local 455: Mitch Hunt, Scott Brown, Don Ramsey, Jim Prout, Ken Meidinger
Cleveland Local 964: Mike Moats
Guam Local 986: John Pangelinan
Hawaii Local 986: Roger Apana, Ken (Moki) Kim,
Seattle Local 986: Jock Creach, Roger Robertson, Phillip Stewart
Portland Local 986: Tom Simmons, Robert Pennell
Los Angeles Local 986: Robert Bishop, Dion Cornelious, Anthony Ybarra
San Francisco Local 856/986: Fred Wood, Dan Johnston, Joe Prisco, John Laurin, Donald Stevens, Leigh Skilling, Greg Sullivan, Mark DeAngles
Assisting the Committee are Business Agents Angel Cantu, Dominic Fierro, John Hennelly, Tommy Esposito, George Graham, Francis Diaz, Justin Muraki, Javier Lectora, David Saucedo, Rich Petrovsky, Charlie Alferio, and Dave Elmore.
Overseeing the process are Airline Division Representatives Clacy Griswold, Paul Alves, and Bob Fisher.
Pilots at United Reach an Agreement in Principal
After more than two years of negotiating with the company for a joint collective bargaining agreement, the combined group of United Pilots represented by ALPA has reached an agreement-in-principle. The agreement talks with the roughly 7000 UA and 5000 CO Pilots have been moving forward with the assistance of the National Mediation Board.
Terms were not disclosed with the announcement, but according to various news sources, ALPA leaders said the agreement would help make economic amends to pilots who had made concessions during difficult years for the airline industry. The pact would provide gains in pay, work rules, job protection and benefits.
Captain Jay Pierce, chairman of the ALPA unit for Continental pilots said, "After many years of enduring the hardships of concessionary and bankruptcy-era contracts, we are pleased to have finally reached an agreement that will allow our pilots and their families to see gains in compensation, work rules, job protections, and retirement and benefits.”
Captain Jay Heppner, chairman of the United Master Executive Council added, "After working under a bankruptcy contract for nearly 10 years, the substantial contributions of the pilots in helping United Airlines survive its darkest economic days and make the United/Continental merger possible will, at last, be respected and rewarded."
The agreement in principal was achieved on most major economic issues. While some details of an agreement still remain open, the pilots are confident a final AIP can be worked out in the coming days, and then submitted to the Pilot members for voting.
While we are very pleased with this announcement, we should point out it will have no significant impact as to the status of the mechanic and related negotiations.
Friday, August 3, 2012
United Airlines And The Air Line Pilots Association Reach Agreement In Principle
CHICAGO, Aug. 3, 2012 /PRNewswire/ -- United Continental Holdings, Inc. (NYSE: UAL) today announced that the company has reached an agreement in principle on a new joint collective bargaining agreement with the Air Line Pilots Association (ALPA) representing pilots at the United and Continental subsidiaries. The agreement is subject to definitive documentation, approvals by the ALPA master executive councils of each subsidiary and ratification by the company's pilots.
"This agreement follows intense negotiations with our pilot group and is an important step forward for our company. I want to thank both negotiating teams for their efforts in reaching this agreement," said Fred Abbott, senior vice president of flight operations for United.
"The National Mediation Board played a crucial role in our negotiations, and I want to recognize NMB member Linda Puchala for her personal involvement and thank Senior Mediator Patricia Sims for her professional and effective mediation support," said Mike Bonds, executive vice president of human resources and labor relations at United. United.com Source
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